Manufacturers posted their fastest rate of job losses in over seven years last month
The Northern Ireland economy “has entered or is entering recession” according to a survey by Ulster Bank.
It suggests Brexit-related uncertainty underpinned the fall in private sector output in August.
Every month the bank asks local businesses about things such as staffing levels, exports and new orders.
It is considered a reliable barometer of private sector activity in Northern Ireland.
Output fell for the sixth month in a row.
A slowdown was seen across all four sectors – manufacturing, construction, services and retail.
Northern Ireland reported the sharpest contraction in business activity of any UK region.
‘Pace of deterioration’
“The latest PMI [purchasing managers index] provides further evidence that Northern Ireland’s private sector has entered, or is entering, recession,” Ulster Bank chief economist Richard Ramsey said.
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Ulster bank
Richard Ramsey said the “pace of deterioration” in business conditions within the construction and manufacturing sectors was concerning
“Perhaps the most concerning elements of August’s report are the pace of deterioration in business conditions within the construction and manufacturing sectors.”
Foreign customers were also reportedly reluctant to commit to new projects, which this survey suggests is reflected in a sharp fall in new export orders.
Business confidence hit a new low with firms feeling the most pessimistic about the future in almost three years.
Prices rising
Stephen Kelly, from Manufacturing NI, told BBC Radio Ulster’s Good Morning Ulster programme that it was not all “doom and gloom”, although Brexit uncertainty was having an impact.
“The challenge here is across the entire sector where we are seeing a significant contraction,” he said.
“We are seeing prices rising extremely quickly in terms of input costs and new future orders are being lagged by the uncertainty that’s out there in terms of the Brexit environment.”
Unemployment has been rising for eight months, but is still at a relatively low level with a strong labour market.
Manufacturers posted their fastest rate of job losses in over seven years last month.